Relational Contracting

A relational contract is a contract that helps organisations meet many of the challenges of doing business in an economy characterised by volatility, uncertainty, complexity and ambiguity. In the network economy, long term business relationships have become an important source of competitive advantage. But companies and organisations struggle to establish and thereafter live by a set of rules based on which they can collaborate to generate value. Research and experience shows that the traditional, transactional contract is often not an efficient instrument to create the kind of partnerships that successful commercial relationships often require. This is where the relational contract provides an alternative. We have over the years assisted several large Nordic companies and organisations in areas such as IT-outsourcing, business process outsourcing and strategic partnerships.

Based on award winning research in behavioural economics and other areas, the relational contract has the following characteristics:

• It focuses on the relationship rather than on the deal
• It establishes a partnership instead of an arms-length relationship
• It embeds value generating social norms at the heart of the commercial relationship
• It mitigates risk through creation of continuous alignment of interest
• It provides a flexible framework, accepting that all contracts are incomplete

Cirio is a thought leader on relational contracting and provide a unique set of services, including:

• Compatibility and trust assessments between organisations
• Drafting and facilitation of negotiations on relational contracts
• Standing neutral services of organisations in partnerships based on relational contracts

We believe in combining business with the personal and therefore bring in-depth expertise, strong dedication and hand-picked, engaged, deal teams to our clients. In addition, we offer multi-disciplinary teams from our digital, biological and physical synergy areas such as information and communications technology, life science, real estate, energy and infrastructure.

With our high quality of service and strong determination to deliver outstanding results, we build long-term relationships with our clients with the aim to be not just an exceptional legal advisor, but also their trusted business partner.

For more information, we invite you to contact David Frydlinger or Erik Linnarsson.